CCOs: Lurching into a County Near You

(The following post originally appeared in Northwest Connection, vol 6 (no. 65), June 2012.)

A Coordinated Care Organization (CCO) is Obamacare. Or it’s not. It only affects those on Medicaid—and only those on Medicaid. Except it doesn’t. But we have to do it and we have to do it now. Or maybe we could wait a year.

About the only thing that is for certain about CCOs at this point is that there are still a lot of questions about them.

In case you missed it, and most people did, healthcare is about to radically change in Oregon, thanks to Gov. Kitzhaber’s Healthcare Transformation. The same man who ushered in the Oregon Health Plan, which after two decades is widely recognized as at least a partial failure if not an outright failure, now brings you the Oregon Healthcare Transformation. But this time, it’s sure to work.

Here’s how it all happened. The CCOs were spawned into being in 2011 by HB 3650, which established the initial framework for the creation of coordinated care organizations. Then in 2012, in the shortened session, SB 1580 gave legislative approval to the Oregon Health Authority’s proposals for CCOs. What’s surprising is that SB 1580 passed with overwhelming support from House Republicans with 23 out of 30 of them voting for it, many of whom call themselves conservative.

All of this is an accelerated version of Obamacare. Under Obamacare, CCOs are known as “ACOs” — Accountable Care Organizations.

A CCO is responsible for providing fully integrated physical health services to provide coordinated care between all aspects of healthcare. Another, simpler way to think of it is ACORN running your healthcare. That, or its Obamacare arriving early in Oregon.

A CCO is a complete overhaul of how healthcare will be administered and institutes numerous new layers of bureaucracy between a patient and their doctor.

No longer will you just see your doctor. Instead, there will be multiple layers of non-medical personnel all making decisions about your healthcare. For example, there will be a Peer Wellness Specialist to assess your needs, a Personal Health Navigator to “enable” you to make decisions, even a Home Care Commission. Somehow all of this new bureaucracy is going to save money and provide better care, even though funds that could be spent on doctors is being spent on bureaucrats.

The stated goal of all of this upheaval is to save money and to put control of administering Medicaid on the local level. To pay for all this, the governor negotiated a $1.9 billion deal paid out over five years, with an initial down payment of $620 million for fiscal year 2013—on the condition that Oregon saves 2% on its Medicaid costs. Funny thing, that. Over those five years, Oregon is likely to spend about $22–$25 billion and 2% would come to $454–$500 million. So we’re spending $1.9 billion to save $500 million? Does no one in the governor’s office have a calculator?

In part, it will “save money” by instituting a hard cap on Medicaid spending. Each CCO will be given a global budget (made up of funding from various sources) but once the money runs out, that’s it.

Recently, Marion County became the first in the state to sign an operating agreement with a CCO when two out of three Republican commissioners voted to do so. Commissioner Patti Milne was the lone holdout.

Let’s get back to some of those questions. The proponents of this adamantly say, “It’s not Obamacare.” And that’s true—sort of. Aside from the obvious-to-everyone-but- the-proponents similarities between CCOs and Obamacare, there have been numerous articles and comments by public officials, including the governor himself, that show a clear connection. Health and Human Services Secretary Sebelius said of the CCOs, “We are proud to support… these efforts to coordinate care, which mirror our efforts at the national level, thanks to the Affordable Care Act.”

If it walks like Obamacare, quacks like Obamacare, looks like Obamacare…

But let’s look at some of the other statements by proponents of the CCO, such as, “It’s only going to affect Medicaid,” meaning it won’t affect the rest of us.

This is a curious thing to say, because on the very first page of the Agreement Marion County just signed, Paragraph B says, “CCOs will initially provide health services to Medicaid beneficiaries” (emphasis mine). Not only that but “H.B. 3650 also directs OHA to develop plans for CCOs to provide healthcare services to employees of the Public Employees’ Benefit Board and the Oregon Educators Benefit Board by contract.” Did they not read their own bill? (Again?) That, and there are plenty of publicized statements by Kitzhaber and others who all say this is designed to eventually capture all of us.

“We have to do it.” Isn’t it funny how a bill designed to give local control about healthcare doesn’t give counties an option? Aside from that, according to Sam Brentano, Marion County Commissioner, if the operating agreement doesn’t work out, “We’ll just opt out.” If that’s the case, then that invalidates his and others’ argument that counties have to do it in the first place.

“Medicaid already has a cap, so this is no big deal.” Except that’s not quite true either, because Medicaid only has a soft cap, which is how states end up with a hole in their budget when they over spend it. A true cap would prevent you from overspending that account. CCOs, however, do have a hard cap.

No less than the far-left Robert Woods Johnson Foundation says, “The total budget for each CCO would be capped at a set amount each year, a feature no other state currently offers… The idea of capping Medicaid spending is innovative and has never been approved by the federal government.”

And no one knows what happens once that money runs out. Does your grandmother simply do without?

What about liability for the counties? While Commissioner Brentano assured me signing the agreement doesn’t have any liability for the county (how does signing any agreement not incur liability?), according to the agreement, the county is a board member with “the authority to manage and conduct the [CCO]’s operations.” Not only that, the agreement puts the county in the position of a super majority. Both of those sure sound like potential liability nightmares if something goes haywire.

There are still plenty of unanswered questions beyond these. Like, what happens if the promised $1.9 billion doesn’t materialize? What’s the impact of allowing non-profit organizations the ability to participate in forprofit CCO? What will be the effect of having a taxing authority on the board of directors? Will they be forced to institute a health tax to fill the gap? Why is there a clause that seems to allow the CCO the ability to create its own insurance company? Or what happens if Obamacare is struck down?

Actually, we know the answer to that one. Oregon’s CCOs were specifically designed to continue whether or not Obamacare survives its court challenge. We are the test case.

I guess if you’re going to fall and break a hip, you better do it in the first half of the year.